ANALYSIS-Obama spending cuts strategy focused on waiting game

February 25, 2013|Reuters

* Seeks to generate outrage among voters after Friday

* First step in protracted partisan battle

By Steve Holland and Jeff Mason

WASHINGTON, Feb 25 (Reuters) - The White House, whileadvancing an aggressive public relations campaign to highlightthe damaging effects of $85 billion in automatic spending cuts,is largely resigned to the fact that they will go into effect onFriday.

With no deal expected in the few days remaining until thecuts kick in, President Barack Obama is pursuing a strategyaimed at generating outrage among Americans that he hopes willforce Republicans to come to the negotiating table and agree tohis demand for higher taxes after the cuts go into place.

The White House is well aware that Republicans need avictory for their conservative supporters after they reluctantlyagreed to income tax increases for the wealthy at the end oflast year.

Officials reason that standing up to the president now andushering in across-the-board spending cuts, no matter howonerous, would allow Republicans to show the conservative TeaParty movement and other right-leaning supporters that they werenot steamrolled into raising tax revenues again.

Once that "victory" is achieved and the cuts go into effecton March 1, officials hope real talks can begin in earnest toturn them off and agree on a wider deal.

"I think it's put Republicans on notice that if they don'tact, they're going to own this, pure and simple," saidDemocratic strategist Bud Jackson.

It is the latest step in yet another Washington budgetshowdown as Obama seeks to use the political clout he feels heearned by winning re-election in November to push forwardproposals aimed at improving the plight of the middle class.

The president has an aggressive agenda that includes tightergun control measures and an immigration overhaul, but he mustdeal first with a budget morass that was partly of his ownmaking.

The White House and Republicans in 2011 came up with theidea for the automatic spending cuts, known as the "sequester,"designing them to be so draconian that no one would ever letthem take place.

Now that they are about to become a reality, top governmentofficials have warned of dire results such as long securitylines at airports and insufficiently guarded borders as a way ofpreparing Americans for what to expect and, more strategically, to encourage them to complain to their lawmakers in Congress.

The White House says it has little flexibility indetermining where the cuts will take place, rejecting claimsfrom Republicans that the president could make trims that wouldbe less economically damaging. "You can't change the fact thatthe impact will be heavy," said White House spokesman JayCarney.

The risk of this strategy, experts say, is that the publicmay not perceive the cuts to be as bad as advertised and failsto get outraged.

"It's a legitimate tactic," said David Yepsen, director ofthe Paul Simon Public Policy Institute at Southern IllinoisUniversity. "The danger is if the sequester goes into effect andthe sky doesn't fall, people will say we're getting along fine."

Republicans are not budging on Obama's insistence that taxrevenues be included in a short- or long-term deal, andDemocrats are unwilling to accept the view of many Republicansthat spending cuts alone can be used to tackle the budgetdeficit.

So a standstill has devolved into a game of waiting out theother side, and both sides seem to have accepted that means thecuts are inevitable.

There has been no substantive contact between Obama andRepublican leaders of Congress since the last fiscal crisis atthe end of 2012, when Republicans accepted higher taxes on thewealthy.

"Reaching a deadline and passing a deadline sometimes thenproduces increased pressure on the parties to come to a deal,"said one Democratic strategist.

"There's time after the clock runs out, and I just thinkboth sides are keenly aware of that, too," he said.

Obama himself has indicated he is hopeful a deal can bereached before March 1.

"Hope springs eternal," he said during a meeting with theprime minister of Japan last Friday, when asked in the OvalOffice about the possibility of averting the cuts.

But the reality is that the cuts are almost certain to takeeffect, at least for a few weeks, until serious negotiations getstarted.